Over the river

Treating the flood of uninsured illegal immigrants threatens to erode the quality of care hospitals can afford to provide.

by Edward Martin

In good days, her dark eyes sparkled, but those days grew rare. The walls of her heart were becoming rigid from restrictive cardiomyopathy, and Jesica Santillan seemed to become even tinier inside her print hospital gown. Spirits leaped when a donor was found and a Duke University Hospital surgeon opened her chest and replaced her heart and lungs. Joy turned to despair when the accidentally mismatched organs failed, and despite a second transplant a week later, she died. Santillan, who turned 17 while awaiting her first transplant, ignited a firestorm over hospital safety and costs. Her bill: nearly $900,000.

Duke University Hospital wrote it off, settled a lawsuit by the family and began rebuilding its reputation. But other circumstances surrounding the girl’s death, less noted at the time, are becoming one of the most volatile issues in health care.

Her mother and stepfather had paid a smuggler $5,000 to bring them and their three children from Mexico to the U.S. They settled in Franklin County, near Raleigh, where jobs were plentiful and employers wouldn’t delve too deeply into immigration status. Her mother became a housekeeper at Louisburg College, and her stepfather was a construction worker.

As many as 600,000 illegal immigrants live in North Carolina, by some estimates a third more than when Jesica died in 2003. Thousands pour into Tar Heel hospitals each year, straining budgets stretched by skimpy Medicare and Medicaid payments and managed-care discounts. No hospitals are immune, not even the best in the state, as ranked for Business North Carolina by Lakewood, Colo.-based Health Grades Inc.

The result can be health-care delivery at its worst. Lacking insurance and family doctors for routine care, illegal immigrants often postpone treatment. Chronic conditions become acute. High blood pressure becomes a stroke. A breast lump metastasizes. “By not providing routine care and checkups, we collectively end up paying more,” Norton says.

Those who pay their own medical bills take a big hit, and care for uninsured illegal immigrants pushes up premiums and co-payments for those who have insurance coverage. Nobody is certain how much it’s costing the state and its legal residents. Educated guesses place it at $500 million to $1 billion a year. A study by Menlo Park, Calif.-based Kaiser Family Foundation and the Pew Hispanic Center in Washington, D.C., found that more than 60% of illegal immigrants are uninsured. In a 2006 study of Hispanic immigration’s economic impact in North Carolina, paid for by the Mexican consulate and the state bankers association, the Kenan Institute of Private Enterprise at UNC Chapel Hill pegged the health-care cost at nearly $300 million, though it used figures that were several years old. Researchers also grouped legal immigrants with illegal ones. Illegals typically work poorer-paying jobs and are less likely to be insured or able to pay their own bills. Eventually, hospital administrators wind up with the issue in their laps.

They complain that the federal Emergency Medical Treatment and Active Labor Act of 1985 — EMTALA — compels them to treat anybody who shows up with an acute problem, regardless of ability to pay. It also discourages them from asking about immigration status for fear of being accused of discrimination. Some cite another factor — the inherent nature of health care.

“Hospitals and their people tend to be compassionate places,” says Don Dalton, vice president of the 135-member North Carolina Hospital Association. “A lot of the people who run hospitals take the position that we’re here to serve the people of the community, regardless of who they are.”

On a blustery winter morning in Concord, two men prop their elbows on the hood of a battered Dodge Neon in the parking lot outside NorthEast Medical Center’s emergency department. On the car’s front bumper is a green, white and red plate, a rendition of the Mexican flag.

“Carpintero,” one says, pointing at himself when asked about a tape measure clipped to his belt. In snatches of English, they explain that the carpenter’s wife had been sick when he left home and that she had called him at his job site. Now, she huddles in the car frightened, reluctant to go into the hospital’s emergency room.

Later in a nearby office, Jorge Patino, 32, discusses the costs and complexities of treating a shadow population. Trained as a doctor in his native Colombia, he is coordinator of NorthEast’s Latino Health Ministries, an effort to shift services to a part of the population that was small and rarely considered a decade ago. “The majority of the immigrants we have here are illegal. They’re hardworking people, and usually the mother stays home. Our job is to educate them about American care, to do proper referrals for screenings.” The effect is twofold: Patients are healthier, and hospitals reduce their costs.

NorthEast, which has 457 beds and recently announced plans to merge with Charlotte-based Carolinas HealthCare System, provided $58 million in uncom-pensated care in 2006. That amounted to $158,000 a day. Administrators are uncertain how much went to care for illegal immigrants but know the impact is large.

“By not providing routine care and checkups, we collectively end up paying more,” an expert says.

In the hospital’s emergency department, bilingual signs welcome patients and Spanish health-education brochures share racks with English equivalents. Dalton says hospitals divide the costs of treating immigrants into two categories. The first are patient-support costs such as the signs and NorthEast’s outreach programs. Nobody, he says, has calculated how much hospitals in North Carolina are pumping into such efforts to educate immigrants and help them navigate American health care.

Virtually all Tar Heel hospitals now use one of several telephone-translation services, racking up thousands of dollars in charges a month, almost exclusively for Hispanic patients. At other hospitals, translators — particularly those with medical expertise — have become one of health-care’s hot specialties.

At WakeMed, an 851-bed health-care system in Raleigh, 17 translators — typical entry-level salary, $37,000 a year — are augmented by part-timers. The hospital also pays about $120,000 a year for telephone translation to the same service used by NorthEast and many other hospitals.

At Pitt County Memorial Hospital, four staff translators and seven part-time translators serve as go-betweens for doctors and patients, not only at the 755-bed hospital in Greenville but its affiliates in Eastern North Carolina. Among them is Duplin General Hospital, where the state’s heaviest concentration of Hispanics — nearly 20% of Duplin County’s population — threatens to swamp the 101-bed hospital in Kenansville.

“By not providing routine care and checkups, we collectively end up paying more,” an expert says.

The second type of cost is uncompensated and charity care. Accounting methods differ, but charity care typically includes treating patients who have no financial resources and are not covered by insurance or any government programs. Uncompensated care might include underpayment by Medicaid. Sometimes charity care is counted as uncompensated care.

Other factors cloud the cost of caring for immigrants. Some hospitals calculate it based on actual costs, while others tally charges, the health-care version of sticker price for procedures. Charges are sometimes double a hospital’s costs. By either measure, the figures are high and climbing as more illegal immigrants come to North Carolina.

WakeMed racked up nearly $100 million in uncompensated and charity costs and charges in 2006, says Deb Friberg, chief operating office and executive vice president of hospital services. That was about 15% of its operating expenses of $687 million last year. Businesses try to hold bad debt to a few percentage points of revenue, says Hunter Wagstaff, director of accounting for the 708-bed, Chapel Hill-based UNC Hospitals system. “Most people in hospitals would love to see 3% or something. Unfortunately, this is the nature of the beast.”

The not-for-profit health system’s operating margin — analogous to the profit margin — has plummeted from about 9% in the early ’90s to 3.9% and is projected to stay there for the foreseeable future. Hospital economists say the margin is still comfortable — hospitals strive for about 3% to 7% — but the downward trend concerns them. Meanwhile, uncompensated care at UNC Hospitals, which doesn’t include charity care, has soared from less than $100 million a year in 2001 to $189 million this year, with an average of 800 patients a day unable to pay all or part of their bills.

Hospitals serving rural areas, with high concentrations of immigrants and fewer insured patients, fare worse. At Pitt County Memorial, uncompensated care, which includes charity care, has more than doubled since 2000, from $17.7 million to $41.5 million in the fiscal year ended in October.

Across the state in the Polk County town of Columbus, 73-bed St. Luke’s Hospital wrote off nearly $3.5 million of charity and uncompensated care last year. “For a small rural hospital, that’s a lot,” says Sandra Page, vice president of patient-care services. In the last two years, St. Luke’s borrowed about $3 million to balance its $50 million annual operating budget. As with many small hospitals, the pinch hurts more than num- bers on the bottom line. Capital spending has been cut. A consul-tant recommends building a $30 million-to-$40 million replacement for the 40-year-old hospital, but no action has been taken.

Melding money, politics, medicine — even morality — the issue of hospital care for illegal immigrants is likely to roil health care for years to come. For one thing, their number has been swelling and is likely to continue.

Data from the 2000 census shows North Carolina had one of the highest birth rates for women of child-bearing age — regardless of legal status — who described themselves as Mexican-American: 181 per 1,000, compared with slightly more than 100 per 1,000 nationwide. Health-care analysts say the difference is in the state’s high propertion of illegals among that demographic and its disproportionate number of younger, more-fertile women. Even though they’re in the country illegally, EMTALA requires hospitals to deliver their babies. If they can’t pay, Medicaid must. The newborns — demographer call them anchor babies — are U.S. citizens, making it unlikely that the mothers will be deported.

Friberg can’t break out WakeMed’s costs of caring for illegal immigrants, but other numbers suggest a trend. One indicator is patient encounters — a patient making 10 visits equals 10 encounters. About 52,000 encounters required Spanish translators in 2006, more than doubling the 24,000 in 2000. Hispanic births at the hospital soared nearly fourfold from 463 in 1997 to 1,819 in 2005. Juan Granados, director of an obstetrics program for high-risk patients, says as many as 85% of the Hispanic mothers were illegal immigrants.

Norton says illegal immigrants are generally healthy and have healthier babies, factors that reduce their need for hospitals. “They’re not your average 18-to-25-year-olds. To make the journey, you need to be in good health.” But Patino says that changes when immigrants discover fast food and sedentary lifestyles. “We see a high increase in Type II — adult onset — diabetes, obesity, particularly in childhood, and other lifestyle diseases.”

Other changes are less obvious but carry profound implications for how all Americans receive health care. “Who pays for uncompensated care?” Norton says. “One way to look at it is that this is functionally social insurance” — also known as universal health care. “It’s certainly not the case that people with zero insurance get zero care.”

Friberg isn’t sure what will happen next. Administrators can write off the millions of dollars immigrant care consumes but not their concerns for the future. “Expense lines are going up and reimbursement lines are going down. We’re fortunate to be living in a county where growth is substantial, but that can’t sustain us. Eventually, those lines are going to meet.”